NIIF to begin funding activities in few days, says FM Jaitley

Further he said that The National Investment and Infrastructure Fund (NIIF) will start funding activities in the next few days as it has got commitments from several sovereign wealth funds.

"Even though the NIIF has become operational and in the next few days from now it will start its major activities," Jaitley said while addressing Best Practices in PPPs and Long-term Infrastructure Financing of BRICS Countries seminar here on Thursday.

The Union Finance Minister reiterated that infrastructure development is one of the highest priorities of central government. The government had set up the Rs 40,000-crore find in December last year as an investment vehicle for funding commercially viable greenfield, brownfield and stalled projects. It was envisioned as a mother fund with several sectoral feeder funds.

"We are awaiting a lot of commitments from various sovereign funds to become either contributors to the main fund itself or to the different sector of infrastructure sector itself which will go into this particular fund (umbrella fund NIIF)," he said.

"I think our model is in the process of evolving and therefore with a large amount of infrastructure needs, which can really be the key to Indian investment and economic activities over the next

several years, which can keep growth rate at a high level. This model has to be perfected," he said.

He added that projects in transportation sector like Highways, Ports and Railways will be area of mega economic activities as far as infrastructure sector in India is concerned.

The Finance Minister further said that investment, both from public and private sector, will be required for infrastructure financing, especially in areas of health, education, sanitation, renewable energy, highways, ports and railways among others.

Finance Minister said, “The Government gives high priority to Infrastructure and has taken a number of policy decisions like NIIF, Innovative new financial instruments such as REITS, INVITS, IDFs. The need of the hours is that BRICS member countries should share their experiences in financing and delivery of infra projects so that they can collectively move to higher quality and efficiency in the delivery of public services.”

Noting that there were certain challenges with regard to NIIF, Economic Affairs Secretary Shaktikanta Das said investors were more interested in investing in specific, dedicated, sectoral fund rather than all-purpose, multi-sector umbrella fund.

Subsequently, the government had to restructure and recast the structure and begin with two sectorally dedicated funds namely highway sector and clean energy fund, he said.

"So, there will be two separate funds that is clean energy fund which will primarily focus on renewable energy, and there will be another fund which is road funds which will take up road projects. These are two funds that we are setting up," Das said. Speaking about investor who are keen to participate in India's sovereign fund, Das said, "We have signed MoUs with Abu Dhabi Investment Authority (ADIA), Qatar Investment Authority (QIA) and Rusnano and we have understanding with the UK treasury and the US treasury.

"There are 2-3 proposals and MoUs to be signed. There is a lot of investment appetite. Its just a matter of weeks or one or two months at best activities taking place."

He also said the bigger investment are interest in the dedicated funds and there is a lot of interest by multilateral institutions and others in funds of the fund.

"The umbrella fund will continue, but at the same time we are also moving on so those who invest in dedicated funds will also take stake in the bigger fund," he added.

The daylong seminar saw who’s who from the field of infrastructure development and financing hailing from BRICS nation brainstorming on the regulatory issues and Financing of Infrastructure; Innovative Investment Vehicles for Long-Term Infrastructure Investment, PPP Project Delivery and Post award Contract management matters.